Gov. Hobbs’ Illegal Power Grab Is Exacerbating Arizona’s Housing Crisis

Bureaucrats working under Arizona Gov. Katie Hobbs’ oversight have imposed a new rule that effectively halts new home construction in some of Maricopa County’s fastest-growing and most affordable areas. This action, taken by the Arizona Department of Water Resources (ADWR) without legislative approval or formal rulemaking, is driving up housing costs for all Arizonans and threatens to stifle economic growth in our state.

It’s one of the most significant bureaucratic overreaches in Arizona’s history—so today, the Goldwater Institute sent a letter to the agency urging bureaucrats to back off.

Before new housing can be constructed in certain parts of Maricopa County, builders must obtain a certificate showing a 100-year groundwater supply. Historically, homebuilders have always met this requirement.

However, in November, the Department of Water Resources amended a groundwater model that prevents new housing projects in large portions of the Valley, including Buckeye and Queen Creek.

This model relies on a flawed concept called “unmet demand.” According to this rule, if a groundwater shortage is projected anywhere within a management area (a specially designated area with a reliance on groundwater), no groundwater is considered available for any use across the entire region.

The model further compounds this issue by arbitrarily placing wells throughout the management area that do not move over the course of 100 years, far in excess of the life expectancy of most wells. If water in a hypothetical well is projected to dip below a certain depth in the East Valley, the agency declares a water shortage for developments in entirely unrelated areas like the West Valley.

This approach defies common sense and abandons how groundwater availability has traditionally been evaluated.

Even more concerning, the Hobbs Administration implemented this unprecedented rule without legislative authorization or the required formal rulemaking process.

Fortunately, Arizona law provides protections against such regulatory overreach. Under state law, sweeping policies like the “unmet demand” rule must go through formal rulemaking, ensuring input from stakeholders and those impacted. The Department of Water Resources disregarded this legal requirement, imposing its policy unilaterally with the stroke of a pen.

Furthermore, all agency rules must be authorized by the Arizona Legislature—a principle rooted in our democratic system, where lawmaking is entrusted to elected representatives, not unelected bureaucrats. The agency’s new rule lacks this essential legislative authorization.

The availability of affordable housing and the responsible stewardship of our natural resources are vital statewide concerns. Decisions on these issues should be made through a transparent, democratic process—not imposed by executive fiat.

We call on Gov. Hobbs and the Department of Water Resources to immediately lift this unjust and illegal moratorium on new home construction.

You can read our letter here.

Jon Riches is the Vice President for Litigation at the Goldwater Institute.